1. ARMs are nowhere near done resetting.
2. Mortgage rates are still at historic lows.
1. Housing market will go through two waves of foreclosures. First wave – subprime buyers and buyers with resetting ARM’s. REOs from the first wave drop market prices and prepare the market for the second wave – “investors” (speculators) and quite generally anyone who bought a house with zero down since 2004.
We’re not entirely through the first wave yet. When you start hearing about people returning keys to the bank simply because they are $100,000 upside down on their mortgage, you will know that it’s time to start looking for a house.
2. If you’re planning to retire and die in that house, (or at least to live there 10+ years) mortgage rates don’t matter. If you foresee a possibility that you will have to sell and move before 2012, it’s best for you to wait.
P.S. Just to show how much further Temecula can fall if conditions are right. Here’s a new 3br 2100 sq ft house, 25 miles from the downtown of 4st largest city in the United States, 30 miles from the nearest ocean beach. Look at the price.
